Energy Structure: Down with Regional Blocades
Apr 29-2021
China has set the official goal of making renewable energy the core component of its energy regime during the 14th Five-Year Plan period. Key hurdles to cross include vested interests and local protectionism, says Prof. Xu Jintao, Deputy Dean of the NSD, in a media interview.
Fossil fuels still dominate current energy consumption, and behind it lies a web of interests that won’t easily cede way. Alarmingly, since the top leadership declared that China would reach peak carbon emissions by 2030, some have seen the remaining years to 2030 as a window period to accelerate the growth of high-carbon industries.
On China’s side to revamp its energy structure is first and foremost the determination of its top leadership to push it through, which will lead to resource allocation to catalyze a desired change. Another favorable condition is China’s technological prowess. Being the largest exporter of renewable energy equipment and technology, China has assisted many countries to develop their alternative energy.
In terms of the technological costs of renewable energy, China has made excellent headways. Over the last decade, photovoltaic power generation has seen its costs drop by over 90%, to a level (per-kilowatt cost) lower than that of fossil power plants. Wind power can also match fire power in per-kilowatt cost. There are grounds for renewable energy to grow rapidly and reach the goal of accounting for 25% of one-time energy consumption in 2030, says Prof. Xu.
To facilitate such growth, industrial policies are needed. For example, a negative list should be initiated to cap the growth rate of fire power at zero and ensure a unified domestic market. Environment tax and carbon tax should be imposed so that fire-power plants and the coal industry can rightly internalize external costs.
A unified domestic market will also help the western regions – rich in renewable energy but small in local markets – to transmit their electricity to other parts of the country, rather than wasting their natural endowment.
Enterprises might have to take on additional costs and consumers might have to pay more for certain products. Given the terrifying threat of climate change, such prices are worth paying to give sustainable development a chance, says Prof. Xu.
